Third li­cens­ing round con­tracts to be signed in early 2017

Financial Mirror (Cyprus) - - FRONT PAGE -

Con­tracts for the third li­cens­ing round in Cyprus’ ex­clu­sive eco­nomic zone (EEZ) will be signed in early 2017, En­ergy Min­is­ter Yior­gos Lakkotrypis said on Mon­day speak­ing at the House Fi­nance Com­mit­tee.

The Min­is­ter said he ex­pected to re­ceive the rel­e­vant re­ports in the next few weeks and sub­mit them to the Cab­i­net. After that, the Min­istry will em­bark on ne­go­ti­a­tions with the bid­ders.

Lakkotrypis noted the par­tic­i­pa­tion of con­sor­tia, such as Exxon Mo­bil and Qatar Petroleum, or ENI and To­tal as an in­di­ca­tion of Cyprus’ EEZ prospects. Ac­cord­ing to the Min­is­ter, a drilling sched­uled to take place in 2017 at EEZ block 11 was also very im­por­tant, since the rock for­ma­tion is sim­i­lar to Zhor’s, the gi­ant gas field off Egypt’s shore. Be­yond talks with To­tal, the govern­ment is also in con­sul­ta­tion with ENI re­gard­ing the com­pany’s drilling.

Re­ply­ing to MPs’ ques­tions, Lakkotrypis said that there is no re­la­tion be­tween the de­vel­op­ment of hy­dro­car­bons and on­go­ing set­tle­ment talks for a Cyprus so­lu­tion. Dur­ing the ses­sion, the Min­is­ter also said that no tech­ni­cal re­ports were con­ducted over the trans­porta­tion of nat­u­ral gas to Turkey.

Fol­low­ing a failed at­tempt for a deal to sup­ply Cyprus with nat­u­ral gas un­til do­mes­tic sources were de­vel­oped, the Min­is­ter said that the Nat­u­ral Gas Pub­lic Com­pany (DEFA) was in­structed to pre­pare a re­port for LNG im­port in­fra­struc­ture.

Elab­o­rat­ing on the Min­istry’s hy­dro­car­bon strat­egy, Lakkotrypis said it was fo­cused on ad­di­tional dis­cov­er­ies in the EEZ, in­volv­ing To­tal and ENI, and the de­vel­op­ment of the “Aphrodite” gas field, with the pipe­line op­tion to Egypt be­ing the most ad­van­ta­geous. He added that fall­ing fuel prices are a mat­ter of dis­cus­sion with the com­pa­nies li­censed to de­velop “Aphrodite” and the Egyp­tian govern­ment.

Con­cern­ing the “EastMed” un­der­wa­ter pipe­line for the trans­porta­tion of nat­u­ral gas be­tween Cyprus, Is­rael and Egypt, the Min­is­ter said the project was fea­si­ble, with an es­ti­mated cost of 5-6 bln euros. It con­tin­ued, how­ever, to be un­der eval­u­a­tion, since the project’s fi­nan­cial vi­a­bil­ity lies in find­ing a buyer.

On the un­der­wa­ter elec­tri­cal ca­ble project, dubbed “Euroa­sia In­ter­con­nec­tor”, the Min­is­ter said that the project pro­moter sub­mit­ted a busi­ness plan to all three coun­tries in­volved - Cyprus, Greece and Is­rael - and awaits ap­proval.

Lakkotrypis added that an in­te­grated casino re­sort is ex­pected to be ready by 2020 and un­til then, a pro­vi­sional casino will be set up in Li­mas­sol, along with four “satel­lite casi­nos” in the other Dis­tricts. The big­gest of the four will be in Ni­cosia.

This is an investment of over half a bil­lion euros dur­ing the first stage, that will pro­vide em­ploy­ment to 4,000 peo­ple dur­ing and after con­struc­tion, while at­tract­ing 300,000 ad­di­tional tourists, Lakkotrypis said and ex­pressed hope that li­censes will be signed be­fore the end of the year.

The Min­is­ter fur­ther said that the cre­ation of an Un­der­sec­re­tariat for Tourism would be a pos­i­tive de­vel­op­ment, al­lo­cat­ing to the in­dus­try the at­ten­tion it de­serves. The new of­fice will re­port di­rectly to the Pres­i­dent.

De­spite Brexit, tourism prospects from the Bri­tish mar­ket seemed favourable, Lakkotrypis added, not­ing how­ever that per capita spend­ing was ex­pected to fall.

Fi­nally, Lakkotrypis said open­ing the elec­tric­ity mar­ket to com­pe­ti­tion is one of his Min­istry’s top pri­or­i­ties, while rel­e­vant reg­u­la­tions are at the fi­nal stages of ap­proval. By the end of the month, the Min­is­ter said, he would pro­pose an in­terim so­lu­tion for 2019-2020, in co­op­er­a­tion with Cyprus’ En­ergy Reg­u­la­tory Au­thor­ity (CERA).

A ten­der for the cre­ation of a tech­nol­ogy park in Pen­takomo has at­tracted no in­vestor in­ter­est so far, with Lakkotrypis not­ing that the dead­line was ex­tended un­til mid-De­cem­ber.

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